Live Broker Calls with Christian Osgood: Episode 5 of the live sessions

Oh shit.

Hey Christian, how's it going?

Hey Garrett. Oh my gosh, wait, Garrett. Okay, I just realized I'm actually cheating. This is the Garrett that I already know.

We do know each other and we've done a couple.

Okay, well this is cheating. Okay, well oops. Um, well, okay, well we're gonna run this anyway. Garrett, um, welcome. Okay, so, okay, well there's a little bit different. Um, how'd you—

Garrett Huey.

I should have read the last name.

Okay.

Uh, Garrett, I have you in front of people. I don't want to surprise you with that. Um, cool. Well, we'll do another one of these afterwards so I don't accidentally cheat. Turns out if you transact— uh, Garrett, uh, did the, uh, he's actually done Abilene and Stephenville with Garrett.

Okay.

Uh, Garrett, I am actually calling on, uh, North Rockwell Avenue, uh, in Oklahoma City.

Cheers.

Oh yes, yes, yes. That's the Rockwell Terrace. It's the sixty unit. This is so funny. I appreciate that it's you. Hey buddy.

Hey, you know, whenever you do a couple deals, you know, your name gets around and unbeknownst to you, I guess looking at it, we've done a couple together and looking forward to doing some more.

That is that is actually very funny. Okay, so for context, guys, Garrett's amazing. He's also a fantastic hunter. He's either selling huge deals or he's hunting awesome things. He's either off-grid or extremely available. That's about accurate.

Yes.

I'm a big fan of Garrett. Also, he is not patient with inspectors who take way too long on 44 units. I forgot about that. And we still talk about that from time to time in the office. So, okay. Well, I'm going to run this exactly as I was planning on running this conversation, and then I'll not cheat later. Okay. So on this particular deal, it's 60 units. My first question, is this deal still available?

Yes. Yes, it is. So I guess long story short, we had it tied up about a year and a half ago and we were getting down to splitting hairs and the seller actually ended up canceling the transaction, which is an odd occurrence. And that buyer didn't want to come back to the table. So we are back out there.

Okay, so you're back out. When did it get relisted?

Um, I think it's been maybe, maybe 2 months now. They went, so they refinanced, uh, put new debt on there through Walker Dunlop, and now we've got that with the assumable debt component. Uh, it's not the best debt in the world, but you know, sometimes that's a plus.

Okay, so, so the financing's assumable. What's the terms of the financing?

Um, I'd have to pull it up. It's been a little bit I've looked at that. Let me see if I have it in the folder.

No problem. If it's not readily available, it's not like a— it was just if you had it in front of you. Okay, well, that explains my— because my first question was going to be, it's been on market for like 523 days, so it was really like on and off. It just came back up.

Yeah, that's actually, uh, good to know. After this, I will call CREXi and have them reset that date because that does not look right.

There you go. Well, yeah, for me, I'm like, hey, we might be solving a problem here. This is—

Listing broker, it doesn't, doesn't show as well as, you know, as you guys as the buyer, you'll see, you know, kind of blood in the water that's been out there for a while and it's probably stale.

There we go. Josh, strike this from the record. This never happened.

Okay.

So we're—

okay.

So on this particular deal, the seller— so the seller killed it. It's been listed for 2 months. How has activity been on this listing so far? If you guys are getting a lot of attention on it, what's the general temperature?

We've, we've gotten, you know, we've gotten a good number of calls, uh, no one that's really been, been real. Um, I mean, to be quite fair, it seems like the Oklahoma market's slowed down a little bit, which, you know, is good for, you know, advantageous buyers. Um, you know, it's just we've had some issues with insurance, you know, more specifically in Tulsa and Oklahoma City. But, um, seems like we're starting to see some pickup. We got that Manchester on May deal on market as well. Well, and we're, you know, fielding calls on both. Um, you know, Oklahoma City is a pretty pocketed market, so you just gotta, gotta be aware of the markets that you're in there.

With the, uh, Manchester on May, how many units is that one? Um, if you know off the top of your head.

Let me see. Sorry, I apologize, it's, uh, you caught me on Friday.

No, that's totally fine. You didn't get any prep for this either.

My partner, uh, Chase, is running that Manchester on May deal, and he sold it to the current group, so I was kind of hands-off, which is, uh, it's pretty nice.

Totally fine. My question I was going to ask is, if I was looking at either of these, are you recommending I look at this one, Manchester on May, or do I have to look at both because they're both so awesome?

So these are, uh, separate sellers, so, you know, it's not required to be purchased together, but they're actually pretty close in Proximity, so it wouldn't be the worst thing in the world to have them both together.

I do like that. I, I prefer to do both deals, generally speaking, if they're both good.

Yep, management efficiencies. So, you know, there's money to be saved. You know, instead of having one, you know, maintenance guy at both properties, you can have one that floats between the two and cut some money there.

Mm-hmm. Well, I am curious though, if you run into the unit count on Manchester, Maine, that would— a I was calling you as an example. That being said, now I'm kind of interested. I might actually want to buy this.

Hey, we can definitely talk more offline on both of these. I actually do have an off-market deal that's pretty attractive as well that I can share details on with you that's lender-owned.

Oh, okay. I do like— I've been doing a lot of lender-owned stuff. Okay. Out of respect for the fact that I've already told you that other people are listening, so thank you for playing with us. I appreciate it. Out of curiosity, what could you tell me that you're also comfortable with a couple other people hearing about the off-market listing, just so they can hear what this part of the call looks like?

And before we hop over, Manchester on May is 100 units on the dot.

Oh, I love this.

So yeah, little, little info there. And then the off-market deal, it's closer to the Air Force Base on the east side of town. It's over 200 units. I think it's the late '70s or, you know, mid-early '80s vintage. Pitched roofs, you know, that's always a plus. No flat roofs, so you don't have to deal with TPO. Um, and the lender's been holding it. The, the group that manages it, um, they're phenomenal. They're out of Fort Smith and they've got that thing humming. Um, so that's— it's a good property, you know. Granted, the lender's been holding it and they've been running it well, so they're not looking to take exactly a loss, but I think they would, you know, re-lend on the deal in some, you know, some capacity until you can refi them out after like a year or so.

Okay. I've been doing a few deals like that this year where we're working directly with the lender. And have you seen flexibility in Oklahoma with the lending? I've had a few of the lenders actually modify the loan to fit what we're doing better. Have you seen that in OKC as well?

Yeah, we're seeing it in Texas as well. Oklahoma, Texas, Arkansas, we're seeing that kind of across the board because these lenders, they don't want to— they're not operators. They don't want to own and operate these assets. Uh, you know, typically, you know, this one's kind of a, a misnomer because usually the properties will go further into disrepair as the lender owns them, you know, because they're just not— they're not operators at the end of the day. So, um, this one's a good opportunity. You can come in, you know, the properties aren't performing, obviously, you know, you can put more money into it, do the value-add program, push rents further, and, you know, take it to that next level. Yes.

Okay, well, since I already know you, um, actually, actually legitimately interested. If you can send that to our favorite Caleb, uh, that would— I will, um, I I'll review this with him as well. I like these. Yeah, I like the sound of all of this. This sounds like, this sounds like potential money.

Yeah, I'll send that to Caleb, uh, and tell him, uh, we chatted.

All right, well, thank you so much for, uh, thank you so much for playing, Garrett. And, uh, I will, uh, yeah, I will, I will call you not in front of a lot of people, uh, shortly because this is very interesting. I actually like the deals that you have.

Yep, awesome. Love it.

All right, talk to you soon.

All right, thanks, brother.

See you.

Bye. Okay. Oops. I was really confused. He's like, hey, Christian. I'm like, wait a second. That was really off-putting for a second. I was like, wait, Garrett Huey? Oh, I reference him all the time. Yes, I've done 2 deals with him. I really like Garrett. Okay. That's why I was like, that's why I gave the little— I was like, oh, Garrett loves hunting. I just wanted him to know I actually remembered who he was. Okay. Well, interesting. First illustration, we will call someone else. I don't have anyone else in Oklahoma. He happens to transact in Texas. That was kind of a fluke.

Illustration.

That took what, 2 seconds? He has an off-market deal. There's another deal. There's 160 units that we know about. There's another one near the Air Force base. Oklahoma guys, is, is the Air Force base different cities? That's good or bad? Is near the Air Force base good or bad in this city?

Generally depends on rents, but yeah, I would say generally the area over there has Increasing in value pretty well.

So I really like over there.

I like this a lot.

The—

when I say do no thought, I mean maybe read the broker's name before you call them. Read their first name and last name. The illustration though is you don't need to give— and you can just call it based on the picture. I don't— I didn't need to know anything about anything. I just wanted to talk to the broker We'll see. I feel like I've moved our relationship forward. If I buy something, it definitely will. I've already transacted with him. If you need some help down there, I know somebody. Can someone choose a broker that I don't know? Let me try the other listing. I'm going to read their name this time. Villas. I know no one with a last name of Dirk Schneider. Okay. Do we know anything? No, don't tell me. Don't tell me. That's cheating. 160 units. What are the— we just talked about 160 units between 2 deals.

Okay.

This is a different one. Villas at Stone Lake. It's been on market for 100 days, so like 3-ish months, a little more. It's listed by Colliers. It's really tempting to ask you questions about this, but then I'm cheating, and that would really ruin the demonstration of how easy this is. Look at him making money while he's teaching us.

I know.

Don't make me jealous. There we go. Should I go under contract for another 400 units by doing 372? The answer is no. Don't, don't. Because you can buy everything doesn't mean that you should. And Cody and I have learned that lesson, um, at least 4 more times than we needed to. But your wife said you could buy anything and everything you wanted to this year. She did say that. That is, that is why we're buying everything this year. Okay, this looks cool. It's by the river.

I agree.

It's not the prettiest.

It's a lake.

That too.

I'm glad I didn't say that on the call. Yeah, nothing fancy, but this is a good example. Always start with a piece of relatability that is true for you. So on this one, I recently closed a 144-unit. You don't lie. Just tell something that's true for you. I'm just going to say something that's true for me. I recognize that my background is not your background. You are always going to be you, but I'm gonna call it exactly as I would without knowing anything, and we'll see if they pick up. I promise I don't know this person. Which one do you guess? Okay, the only thing I'll cheat on— which, which, is there a preferred person I'll call so I have better odds of getting picked up? I don't know, I think I called a guy named Chris. Is there a Chris on this? There ain't no Chrises.

Maybe that was a different one.

No one, no one, no more Chrises in Texas or in Oklahoma. That's too confusing. I still can't believe it was Garrett Huey. 405-514-0340. That's why I'm like, I'll bring somebody there. Put me in it, coach.

Please leave your message for 405-514-0340.

Hey, this is Christian. I had a quick question for you on Villas at Stone Lake. It looks like a 160-unit you guys have over there. Uh, if you can give me a call back, my number is 425-336-9332. Appreciate it. Try one more person there. Obviously Jason Turner was who we needed to call. One thing I found, if you call out of state, they almost always call you back. But if your area code like is a super mismatch, like I'm Seattle, I'll get less picks up— pickups in Oklahoma than I would if I was calling Seattle.

It's also 5:30 there, so I mean, you know.

On a Friday.

Let's do Oregon or Montana. We certainly could. However, this is how many things I pulled up into our awesome internet. Make sure that's gone.

Okay.

Jason Turner.

If not, at least, I mean, At least you guys can see how it works. I'm glad we got something.

I'll see if this person is available.

Christian Osgood, Villas at Stone Lake. Brokers, don't do that. Don't do that to me.

Thanks. Please stay on the line.

I don't want to talk to your AI assistant. I'm already turned off. I don't want this anymore. Eric records his own voicemail. Get Eric's voice when you call him. It's great.

I'm sorry, this person is not available. If you would like to leave an additional message, please reply after the tone.

Hey, this is Christian. I had a question for on a listing you guys have, Villas at Stone Lake. Sorry, I'm calling a little late in the afternoon here. If you get a moment, if you can give me a call at 425-336-9332, I would appreciate it. Thank you. Okay, well, here's where we're at so far. Let me do a little teaching between these, and I'll try to pull up one more. The difficulty of going through this process of seeing a number and then calling the number, the cool thing is you will not have to do it in front of a whole bunch of people. It's way easier if It's, it's, it's kind of weird to— it's not very hard to do. And you're just a normal person asking about a normal deal. The normal flow of conversation, which was a little harder to get into with Garrett because he already knows me, so there wasn't like the intro, is first of all, ask if it's still available, which we did verify. On this particular one, I would let him know in like 2 sentences my backstory. I live in Dallas. I invest in secondary markets around Dallas that are about a 3-hour drive away. Oklahoma City is the same distance as every other market I'm in. We're just not in OKC yet. I saw this deal. It's similar to the type of stuff that I like to buy. I wouldn't say anything else. Just let them respond. And then we'd pretty much get into the exact same conversation. Well, my partner really knows more about this deal than I do. Awesome. What do you know about the deal? We learned right off the bat they screwed up the way they listed it. Who here has looked at a listing that either says unpriced or on market for like an eternity and didn't call it because you're like, "Uh, there's a problem." Show of hands, who who's actually like skipped? Okay, I'm seeing a few hands. It wasn't even really on market for a long period of time. It was on and then it was off and then it was on. It's also really good to know. Okay, if I'm working with this individual seller. We might have— they've been difficult on the transaction before. That almost makes me more interested in the 100-unit opportunity. Not that I'm telling everyone to do a first deal for 100 units. I'm just— as an example, I'm more interested in 100 units than I am the 60 with the problem seller. Potentially, if the deals were both identical and the same, I'd probably lean that direction. We learned a lot. All we got out of an intro call that any of you would've got roughly with the same conversation if you were just talking about the deal. Yes, I have this deal. We have another deal that you might want to take a look at. There's an off-market opportunity that I can get more information for you on if you're interested. Excellent. Snag some details on those, hop off the call, underwrite the deal. It's a Friday afternoon. Text them back, email them or text them back this evening, or you can wait till Saturday. I'm like, hey, had a chance to look over the stuff. I'm actually really interested. I think I'm your buyer for this. Let's hop on a call and discuss. I think that's a good place to start on this. You're building a relationship. I don't want to just shoot an offer at him. I probably have a couple of questions. I didn't waste any of his time. That took very little of Garrett's day. I'm now a potential— he might make a lot of money off me again. I'm super happy with this. See if we can grab another one.

You want to know more about that one?

Oh, yes, yes. Grab the mic. I want to know more about this. Hop on up. What would have happened if we actually got them on the call? I mean, I'm interested.

So when I called about this one, I asked for the— what's the whisper price? It said $6 million. Owner wants at least $5 million.

Okay.

It's owned by hard money. Probably needs $3 to $3.5 million. To put into it, but they think it's worth about $12 million.

That sounds doable. What's the—

what's the—

like, several— It's hard.

Several units are burned out.

Oh, that's interesting.

Renovation.

So it just needs a lot of work. I think they're like 30% occupied.

Okay. So it's in hard money. They want to sell for a really low price for what it is, but you have to take all of the risk of doing the deal. Yeah. Wait, whisper price is $6 million, but they want $5 million? Well, I didn't— that's the only part I didn't follow.

They've been telling people $6 million, but the broker basically said, I think he might take $5 million.

I like that. The whisper price is $6 million, but it's $5 million. It's really $4 million. Yeah. And then you underwrite the deal and you might find out $4.5 million is where this is worth the risk and where I get day 1 cash flow out of where it's at. And then I have to have that conversation with them. If I get you out of hard money and $4.5 million is what solves your problem, You might— that's what I talk— this is actually a perfect illustration. I mentioned earlier, your goal is to find out what the problem is and are you equipped to solve it. If I can buy this deal where it cash flows day one, I'm much more interested in solving because now I have upside, but I'm at least getting paid while I hold it. Like, I'm, I'm now interested in the construction project if that condition could be met. I don't know if it can. When I talk about like we have a legitimate chance of getting it accepted, if I went through this conversation and now I have an idea what the project is, And I have a proposal that makes some amount of financial sense, I would call the broker and the broker— I keep— now broker is just synonymous with Eric, so I automatically look at Eric. I would call the agent on the deal and I would tell them, hey, I underwrote this deal. This is where it works for me. They have hard money pressure. That's— they're obviously bleeding on it. Their debt may or may not already be due. They could accept that. I could be solving a problem for them. If they owe more on it, maybe they owe $5 million and it only works at $4.5 million. Your next step there is you would have a conversation with the lender. If they're all about to go into default, is there a universe in which you guys take a little haircut to not take this deal back? Which is how I'm buying a deal right now. And there's, I've seen a few opportunities through Texas, Oklahoma, Louisiana, and Tennessee that all have that same condition. The lender will take a discount on what they owe in lieu of foreclosing on the seller. And not getting foreclosed on is awesome. As an owner of a building, not getting a foreclosure is best-case scenario. You do not want that to happen. That is, you are done playing with conventional debt for a long time if that happens. That is the ultimate— don't have that happen. Any questions so far?

Of course.

Yes, sir.

What's your opinion on a population that's stale? Has it increased or decreased?

The deal has to be a little bit better. I— a good deal in a good area is great. If we're not seeing declining population, that's— what I would be worried about is there's a ton of new build and the population is not growing at all. That would be a little bit concerning. But if you're in an area where it's just like, hey, the housing's good, the deal's good, That's a deal that moves you forward financially. I would want to look over the timeline and make sure that it's been equally stale for a long time. If it's like recently flatlined, I'm not sure that it's going to go up or start trending down. But if you're looking at a market, there's markets that have had the same population for 15 years, more or less. If it's that stable, then basically you want to know what you're buying. But I would not be banking on, hey, I'm buying in an area based on cash flow for a ton of appreciation. if there's no growth. So I would really focus— the metric that I would hyperfocus on is we need more cash flow than a deal that is in a high-growth area. If I usually would see 8%, I really want to start closer to 12%. I want to be in the double digits, at least 10% cash flow. I'm like, okay, if I'm holding this, there's good returns. If we don't get a lot of upward pressure on demand, If we hold the same, we're doing pretty good. So I just want more cash flow out of that deal.

Phil, what are you defining as the market or the area?

I'll put up the mic really quick, even though you're the loudest person here. No one knows what I'm talking about. Those who are here—

Can you define— oh, wow. Can you define, like, are you talking about county, city, like geographically, how big of an area are you talking about when you're saying population size?

Oh, great question.

Because you can have a city or a borough that's gaining, but the county is shrinking.

How are you looking at it? Well, and then there's also— so the answer is you could look at Seattle and it's not even the city, it's a submarket of the city is what you're looking at. So what you're looking at is really I'm looking at the population growth for the rentable population of my unit. So in a tertiary market like Stephenville, the city of Stephenville is my population size. All the cities outside of Stephenville have a little bit of distance, but people aren't driving over from Mineral Wells and Granbury to live in Stephenville. and people aren't vice versa. My market is Stephenville, therefore it's Stephenville. If I'm looking in Seattle, Ballard is not— Ballard isn't even Fremont. Like, each neighborhood in Seattle has its own supply and demand and population. And I really— Capitol Hill during COVID the police just abandoned the area and it was just an autonomous zone. That is much different Then again, like Fremont— I don't know enough of Seattle. I only know Ballard and Fremont and Capitol Hill. So the, the 3 of them are their own markets. I'm not going to compare one hill in Seattle to the other hill because it's not the same renter pool, generally speaking. You have some crossover, but I'm looking at my rentable population. So there's areas— Grant County, where Cody and I invest a bunch. It is feasible that someone from Moses Lake would go over to Ephrata. They're about 20 minutes apart. It's not the exact same population, but I would look at Quincy, Soap Lake, Ephrata. I would look at really all of northern Grant County and say, this is my rentable population for these units. Cody, would you say that's pretty accurate for, for Grant County? We'll look at more than just Moses for where you would find renters.

Yeah, it's similar but different because Quincy's got richer people than Ephrata and Dope Lake, Soap Lake.

It's a little rough around the edges.

Yeah.

There's different people living there. I would be more concerned in that area if population was going down in Quincy, down in Ephrata, down in Soap Lake, up in Moses Lake. I'd be like, oh man, there's— I need to understand this area better. If everything's going up in population, I'm like, this is great. But it's going to be— the short answer is, who, who would potentially be a tenant for you? I want to see that going up. It could be a city, it could be a neighborhood, it could be a county. It really depends on population.

So what I was looking at is, uh, the area I was looking at lost a major employer, and so rent has been stabilized or on the decline, but there is a potential new Employer, a government contract. And I think a government contract, you could pretty much count on that's going to happen.

Typically what you want to avoid in any market is single employer risk. I would not have invested in Grant County, Washington if Boeing was the only employer. And thank goodness, because they actually did some layoffs. They have battery manufacturing They have a bunch of data centers. Microsoft's over there. They have agriculture. You have multiple employers in that area. There are areas where if this company lays off people, your portfolio is now dead. I worry about those around military bases. Military bases sometimes just get shut down. It's a thing that happens. So if it is like— I'm not worried about Bremerton. We're the largest naval base on this coast. Not worried about that shutting down. You're looking at me weird, but it is. I think for the submarine— Nuclear base. We do the nuclear here. Good correction. My buddy's a nuclear engineer there. We're not shutting down Bremerton. Very unlikely. It would be almost impossible to take that and move it somewhere else. But there are some bases that do shut down. If that is all of your rentable population or the main one, I would not invest there unless there were other drivers. There's some markets in Texas that I've had people bring to the calls Where it's like, it's a giant meatpacking facility is like 85% of the jobs. I'm like, they're probably not gonna move, but you're not investing in housing in that area. You're investing in the success of a meatpacking company. That's not, that's not really my thing. I don't know enough about that industry. I'm not going to do that. And it could expand to large markets too. Like the biggest example being like the auto industry in Detroit, like Or the steel industry in Pennsylvania. Like, Pennsylvania got absolutely slammed.

Yeah, it's taken them 2 decades to dig back. Like, they're starting to get medical tech, AI, and government. Yeah.

Investing in it.

So now there's multiple.

Yeah.

So if you have, if you have single employer risk, you have to factor for that risk. It is a legitimate thing that could happen. Would my portfolio survive? The foundational rules: can I buy it and can I never lose it? I need to be able to keep it in the event that this industry completely collapsed. Will my property survive? If the answer is no, then I probably— that area is too small or too niche. Any other questions on the owner thing and finding deals? Not— I have one thing that I really want to share. Huge bottleneck for people. You get It's the same as falling in love with a debt product. You fall in love with a specific city, you get too specific on your market, and you go, I'm only going to buy in Stephenville, Texas, and I've decided that's my market. I just have my Tarleton hat. I love this market. I'm only going to buy here. I'm looking for deals here. And you find there's only 4 deals to do. I've done the deals that are available to do in Stephenville. I challenge anyone else to do a deal that is a sincerely good deal right now. I know every building, every owner that is multifamily. There is no way— I don't believe that someone will shake loose a deal right now, this second in that market. We have— I have worked that market. However, if you expanded a little bit, you would find opportunity. Concentric circles. If I was like, Stephenville is the number one place I want to invest, I would do exactly what we just did. I would call brokers. I'd have these conversations. I would try to meet some owners in that market. I would get traction going. And then I would draw a little circle outside of that and you'd end up in Mineral Wells and Granbury, Texas, and these other secondary markets. And you go another circle out of that and now you're starting to hit Weatherford, Texas. You go a little further out, you're hitting Waco. But what I don't want to do is stop calling on deals or stop working opportunities. If I'm running out of momentum in a certain area, just keep expanding the circles. I closed what was closable in Stephenville at that time. It's a 30,000-person market. It's not a big market. We did 186 units. That's, that's what would shake loose. And I have great leads on other deals that will come available later, but aren't— they're just not available right now. Perfect. Instead of trying to hammer the daylights out of that market, we expanded a little bit and then we expanded again and we hit Abilene and we did the 144-unit and then we did an 80-unit and then we just went under contract for another 80-unit. And Abilene has 180,000 people, so there's more deals to do in Abilene. We'll hammer Abilene, but there's going to be a point where we're not going to do every single property in Abilene. And so we're opening Longview at the same time. But that, that is the way to do it. Don't lose momentum because you married one city or one specific market. But when you close in that market, double, triple, quadruple down, close what is closable there because your plumbers, property managers, electricians, lawyers, title company. You'll be able to build a business there with people that you know, like, and trust, and you'll make way more money.

That actually leads exactly into my question. It's like, okay, you said go out in concentric circles. What happens if those circles go outside of your lawyer, your doctor, or your contractors and all that stuff? Yeah, you gotta sit there and build a new team, but like, how do you—

Don't open every market at the same time. That is, that is the answer. You do not— what you don't want to do is build so much business and buy so fast. Cody referenced this, uh, briefly earlier. If you are buying so quickly that you're saying, I'm over here and I'm over here and I'm over here, and you're not setting up anything—

I'm—

this is part of what I'll open tomorrow with this specifically. But what happens when you do so much that you've just bought everything, but you haven't finalized your systems anywhere? And what happens typically is you perform worse and your profit margin starts decreasing. Your expenses go up, your income goes down. You need to set up systems in the market before you expand. It's part of why I engineered my PM organization the way that I did is we have, after doing enough of these markets, I've built a core team of people where we have a rapid deployment plan of— this one deal is scheduled to close in 45 days. We opened it up yesterday. We're doing hire— like, on Monday, we're opening the hiring for the position. If you don't have that in place yet, that's fine. But don't open up Stephenville and Abilene and Longview in your first year because you can. I'll go way more into that. Tomorrow, but that's the model. Come up to the mic since we're already doing Q&A. Well, we'll come up here and then we'll do a full group Q&A here right after too. So we'll wrap here, 5 minutes, take a break, and then we'll do a full team Q&A.

Just on the broker call, you kind of got into, have you got any engagement so far? But would you also try to get into things like what's the motivation of the seller? What kind of finance do they have? I mean, if the conversation is going well, You kind of try to lead into that a little more, right?

Uh, yes.

I—

what I don't do personally is I don't grill the broker on the specific, specific seller motivations. I'm going to answer and ask questions that relate to me closing on the deal for what the deal is. If I'm— and this is just when I was a broker— if someone's just grilling me on like, hey, what does the seller want here? What does the seller want here? I'm like, I'll answer to an extent, but my goal is not just to like give you all of the pieces and have you come back with something creative. I want you to be ideally a relatively conventional buyer. That's my perfect, perfect universe.

Right.

So your best case scenario, in my opinion, is just going through the details of the deal, get the financials, get the feel for the deal, I do like the question, hey, how do you think the financing is going to work on this? He led with the financing is assumable, and I need to look up more information on what that is. So I'm not going to then go back to my script and be like, all right, now ask him clarifying questions about finance. I'm like, he already mentioned it, move on. And then on this one, you always end building confidence. So on this one, for me, it was just, okay, I'm actually pretty interested. This sounds really good. The context of this was you're in front of a bunch of people, you know, you're in front of a bunch of people, but the ending was still the same. I want to do this deal. Send this to Caleb. You know, I'm going to look at it. We're going to get this done. It would have been a different version of that if he didn't know me.

It would have been—

This is probably what we're looking for. I probably would have asked him, hey, my plan involves moving employees and resources into this market to open the market. Does this deal have an office? That's really interesting to me. And that also is a closing— to me, if I'm a broker, I'm seeing them put together the pieces of this deal might really work for me. I might be the right buyer for this deal. So it would be an iteration of what makes me uniquely a good buyer to do this. It just happened to be we're all friends, sent it to Caleb. It's a fluke.

So you can run the numbers and then come back.

Exactly.

Something that fits.

Yeah, and that's exactly what we'll do. He's gonna actually send us numbers. I'm actually gonna get back to him.

What a closer!

I want to buy real estate. The goal is to buy the property. I'm not. I'm not ambiguous with that to the to the broker.

So this is not really a question, but a statement. What you just said. Between myself and this gentleman here, we looked up CREXi and LoopNet in the city I want to look into, and there are 3 listings. One listing says it was built in 2027, so it's not even built yet. So that, that just goes to say what you, uh, said, you know, expand your search area.

Yes, you want to expand the search area. Have you called the other listings that are there?

Not yet.

That's a good start. Do that. That'll help.

Because they may tell you that they have another 200 units that's not even listed.

They, they may know more units available, and now you've worked that area, and now you can look at another one. What I wouldn't do is choose another area before you called the one that you really wanted to buy. Like, open up the opportunities there and then move on to the next opportunities. Don't get stuck there, but also don't skip it because there's not a lot. See what you can open up. Any other questions on owner— or sorry, on broker-specific calling, negotiating, putting it together as an investor? How frequently is too frequently to communicate if they don't lead with like, hey, I have another deal or something like that, but you want to keep building the relationship with the broker? How frequently should you communicate with a broker? You're trying to build a relationship with them. It's exactly like any other relationship. Don't be weird. I don't know why I need to say it, but it's very— Cody can attest to this. My first few calls, I was really weird. You're going to be awkward. You're going to be a little bit clunky. Don't make yourself even more awkward. Like, you're trying to date someone and you text them and they don't text you back. Don't like text them 7 more times. It's weird. Don't be weird. Also, if I have a reason to talk to you, I'll talk to you. So for me, the general thing is if I don't have anything to talk to them about, like any of my friends, I don't usually call my friends just to be like, hey man, I was thinking about you, let's chat. I don't know, maybe people do that. That's weird to me.

Yeah.

If one of my friends, especially as men, but if a guy called me like, dude, how are you feeling? And I was like, fine, what's up? Like, it's just weird. Don't be weird. But if I had a question, I was like, hey, I saw a listing in your area. You just came to mind. What do you think of this neighborhood? That makes a ton of sense. And so if I talked to you 3 days ago and I see a listing in your area, I think about you again, I'll absolutely call you and be like, dude, I know we just talked. What do you think of this area? So I don't think there's a correct amount. There's just too much or not enough based on what you actually have to legitimately talk to them about. Thank you.

Yeah, I think to go with your question, if you do You do an intro, you're a buyer for the market, maybe ask him about a deal he had listed and he wants to keep talking to you. Shoot an email and just say, hey, we talked about 2 weeks ago, I just want to see if anything new has popped up. Then you can wait another month, send another email, hey, just checking back in, anything off market worth looking at? And you know, you can do these periodic steps that it's just quick. You know I'm here to buy. I don't want to waste your time.

Do you got anything?

Has anything popped up in the last month or 2 weeks or, you know, 2 months, whatever it is? You do that periodically through, you know, whatever brokers you're looking at, and that's not creepy, that's not weird.

That's a normal thing to do, right?

It is, you know, it's— and I think that's a way to stay on top of them because frankly, yeah, you got to stay on top of brokers because they get new calls, new clients looking for stuff. They might not take good notes or actually forgot about you. So it's, you know, help you help yourself sort of deal.

We're gonna add that to the course. Don't be weird. That's a good— that's a good rule. That's a good rule for all real estate. Real estate is just like literally everything else. It's just that there's more zeros. And so people get weird. You're buying a building, you're buying a product, it's like shopping for anything. You would love to get a good deal. That's why I use the buy guitar analogy all the time. I'm like, for some reason, if you're buying a $2,000 guitar, And they want $3,000 for it. I can do that negotiation and it clicks for everyone. And then we talk about buying a building and people are like, whoa, what do we do? It's like the same thing you do for everything. Just be a normal person is the easiest answer to that. Good question, though. Any other questions for this section? The next one's Q&A too. So think about your questions. Hang out with everyone. Cue the music again. We'll take one last final break and then we are going to stop exactly By 5 or earlier because the band needs to set up. So we'll get rolling here soon. Take a 10-minute break. That waits among the shelves.